N855M Fraud: EFCC Says Ex-Keystone Bank officials Converted Funds to Personal Use

Posted by African Examiner Featured, Latest Headlines, News Wednesday, December 11th, 2013

At the resume trial involving the sum of N855million, A prosecution witness of the Economic and Financial Crimes Commission (EFCC) Chukwuma Orji while tendering documents before a Lagos High Court, Ikeja, on Wednesday demonstrated how three top management staff members of the Keystone Bank PLC in connivance with an Indian national, Ashok Isran, allegedly converted over N800million belonging to Sir Daniel Chukwudozie, the Managing Director of Dozzy Oil and Gas Limited to personal use under the guise of non-existing share placement.

The defendants, Anayo Nwosu, Deputy Manager of the defunct Bank PHB; Olajide Oshodi, Sunny Obazee both Managers of the bank, Ashok Isran an Indian National; and two companies belonging to them (NULEC Industries Limited and Keystone Bank) are facing a two count charge of conspiracy and obtaining a total sum of N855million preferred against them by the anti graft agency.

Earlier on Tuesday, Mr. Orji, in his evidence-in-chief revealed that top management of defunct Bank PHB front a company known as Drilcom Nigeria Limited with Mr Olajide Oshodi as the key person.

According to Orji, Nulec and the said management of Bank PHB deceived investors into believing that there is an underwriting agency and they collect fee from these investors.

He further gave the reason why Nulec shares were not listed with the Security and Exchange Commission (SEC) as the fact that Nulec cannot account for the proceeds of their private placement, adding that Nulec and Bank PHB gave false statement of Nulec account while the private placement for the company was going on.

Orji on Tuesday also said “that Nulec had lots of financial problems and Bank PHB knows that the N130 million Nulec owed them may not be easily realised, hence the conspired to deceive investors”

Documents tendered as exhibits on Wednesday proceedings includes: statements of accounts belonging to the defendants with the United Bank for Africa (UBA) which allegedly served as channel through which funds were wired out and returned to the country.

Mr. Orji also told the court how Nulec Industries used its domiciliary account with UBA to wire some funds to RISA Enterprises of Switzerland, a firm belonging to Isran. He said the fund was returned back to the country through a bizarre pattern through the same UBA domiciliary account.

According to him, “We wrote two separate letters to Skye Bank, GTB and UBA. We received their replies. Before the commencement of the private placement shares, Nulec Industries was indebted to the tune of N130million. And this can be seen clearly here that the incorporating account that Nulec was indebted up till 16th July, 2008 when the first instalment of N285million hit the account.

“That was how the debited account of the company with the bank was turned to credit. The money which was meant to be used for the private placement was converted to private use contrary to the agreed principle.

“The role of the bank was to ensure that the fund in their custody was kept safe but they failed in their responsibility. Another sum of N19.5million was kept with Dircom Nigeria Limited which was a front company allegedly used by the top management staff of the bank.

“It was the third defendant Olajide Oshodi who was the leader of the team that marketed the private placement share to the Dozzy Oil and Gas. This is a clear demonstration that the bank did not carry out the responsibility as an investment bank and ensure that the money was utilised but allowed the money to be diverted.”